July 18, 2022

What is PEMDAS?

By:  Marci Barfuss, University Financial Group

Take a second and think back to your high school or even junior high math class.  Do you remember ‘Please Excuse My Dear Aunt Sally’?  Me either, but it is a real thing!  If you were to solve the following equation what would your answer be: 2+2×2?  Did you answer 8?  That would be incorrect, the answer is 6.  This is where PEMDAS and Aunt Sally remind us to follow the proper order of operation (parenthesis, exponents, multiplication, division, addition, and subtraction).  For that equation, we need to multiply before we add.  When it comes to our financial situation, there is a financial order to follow.


– Protection is going to be our insurances (auto, home, life, disability, etc.) to help in situations that could be financially devastating without the coverage.  Did you know about 70% of Americans have less than $1000 in savings? (source: http://www.fortunly.com)

Emergency Fund

– The goal is to build up enough to cover about 4 months of living expenses.  This may be a goal that takes several years depending on your situation.

Monthly Cash Flow

– Monthly Cash Flow is essential, especially if you are living paycheck to paycheck.  Getting to know where your money goes will help you be more efficient in creating a plan for moving toward financial security.

Debt Reduction

– Not all debt is equal.  Do you find you are so focused on debt reduction that you do not have any monthly cash flow?  It’s important to evaluate your debt and prioritize what gets paid off faster so you have a better balance with your cash flow.

Asset Optimization

– Asset optimization focuses on tax efficiency, such as health savings accounts and municipal bond funds.

Succession Plan

– Succession Plan is starting the conversation of “If something were to happen….” With only about 40% of Americans having a will or estate plan, we need to be having more of these conversations. (source: http://www.AARP.org)

PEMDAS is your road map to breaking this down into smaller tasks in the right order.  Start with asking yourself, “If I were to get in an accident or get sick and not be able to work for 3 months would I be okay financially?  Do I have the protection in place to help me when the unexpected happens?”

Securities offered through The O.N. Equity Sales Company, member FINRA/SIPC, One Financial Way, Cincinnati, OH 45242 (513)794-6794

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